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Macro Landscape: A Market at a Crossroads
The U.S. equity market opens this week under the shadow of Friday’s jobs shock — a meager 22K jobs added in August versus expectations of ~80K, with manufacturing shedding 12K positions. The unemployment rate ticked up to 4.3%, sparking a sharp repricing in interest rate expectations.
Bond markets reacted instantly: the 10-year Treasury yield collapsed to 4.08%, its lowest level since April, as traders rushed into safe-haven assets. Gold surged to a record $3,642/oz, while silver broke above $40 for the first time in 14 years.
The narrative is now split:
- Optimists see a softer labor market as the green light for the Fed to cut rates and extend the bull run.
- Skeptics warn that the slowdown is real, and rate cuts may not be enough to offset weakening demand.
Major Indexes – Friday’s Close
| Index | Close | Daily Change | Weekly Change | YTD Change |
|---|---|---|---|---|
| Dow Jones | 45,400.86 | -0.50% | -0.32% | +6.71% |
| S&P 500 | 6,481.50 | -0.30% | +0.33% | +10.20% |
| NASDAQ | 21,700.39 | ~Flat | +1.14% | +12.37% |
| Russell 2000 | 2,391.05 | +1.04% | +1.04% | +7.21% |
Key Events This Week
| Date | Event | Why It Matters |
|---|---|---|
| Tue, Sept. 9 | China CPI/PPI | Signals on global disinflation vs. stagflation risk; impacts commodities & EM FX |
| Wed, Sept. 10 | U.S. CPI | Core CPI expected +0.2% MoM; a miss could lock in a 50 bps Fed cut |
| Thu, Sept. 11 | ECB Rate Decision | Eurozone inflation cooling; markets split on whether ECB cuts now or waits |
| Thu, Sept. 11 | U.S. PPI | Confirms or contradicts CPI trend; key for bond market follow-through |
| Fri, Sept. 12 | U.S. Consumer Sentiment (UMich) | Forward-looking demand gauge; watch inflation expectations component |
Technical Levels Playbook – Week of Sept. 8
| Asset | Support Levels | Resistance Levels | Bias | Notes |
|---|---|---|---|---|
| S&P 500 (SPX) | 6,420 / 6,350 | 6,520 / 6,600 | Neutral → Bullish above 6,520 | Break above 6,520 could trigger momentum buying into CPI |
| Gold (XAU/USD) | $3,580 / $3,540 | $3,660 / $3,700 | Bullish | Strong bid on dips; CPI miss could send it through $3,700 |
| EUR/USD | 1.0820 / 1.0780 | 1.0920 / 1.0980 | Event-Driven | ECB decision Thursday is the key breakout catalyst |
NiceBreakout Playbook Summary
- Long Precious Metals into CPI as a hedge against dovish Fed surprise.
- Fade Small-Cap Rallies until labor data stabilizes.
- Watch EUR/USD around ECB decision for potential breakout trades.
- Consider Straddles/Strangles on CPI for volatility capture.
Legal Disclaimer
This article is for educational purposes only and does not constitute financial advice or a recommendation to buy or sell any specific securities. Always consult with a licensed financial advisor before making investment decisions. This post may include affiliate links. If you click and purchase, I may receive a small commission at no additional cost to you.
About Daniel M.
Founder of Nice Breakout
founder of Nice Breakout is a seasoned professional with over 5 years of dedicated experience navigating the intricacies of financial markets, particularly utilizing the Thinkorswim platform. His passion lies in empowering traders and investors by providing insightful analysis and cutting-edge tools.